Contracts That May Be Unenforceable

Circumstances That Can Invalidate an Agreement

As the law of contracts has evolved over centuries, certain requirements have been established to ensure the enforceability of an agreement. Accordingly, a number of situations have been identified where a contract generally will be considered invalid:

Where the Purpose of the Contract Is Illegal—The court will not enforce any type of agreement to commit or participate in any illegal activity. For example, if the sale of certain prescription drugs is controlled by the state, any contract to contravene that control will be unenforceable.

Where the Agreement Violates Public Policy—This usually applies to contracts to waive certain inherent rights, such as the right to belong to or join a union, the right to take medical leave, or the right to be free from discrimination on the basis of race, creed, religion, gender, or other suspect classification.

Where One of the Parties Lacked the Capacity to Enter a Contract—The parties to a contract must understand that they are being legally bound and understand the terms of the agreement—their rights and responsibilities. If a person is drunk or under the influence of drugs, mentally unstable, or a minor, they may lack the capacity to enter a contract.

Duress, Misrepresentation, or Undue Influence—Both parties must voluntarily enter into the agreement. Duress, undue influence, and misrepresentation all make the willingness to enter into the contract suspect.

Non-Disclosure of a Material Fact—Failure to reveal an important fact about the subject of the contract may void the agreement. However, the court can consider whether the other party could have learned of the material fact through the exercise of reasonable care.

Unconscionability—If one party has vastly superior bargaining power (e.g., large corporations), and the court determines that the other party could not negotiate a fair deal, the contract may be invalidated.

Impossibility of Performance—If it would be impossible or impracticable for one of the parties to fulfill his or her obligations, the contract can be voided.

Contact Attorney Howard N. Sobel

At the office of Howard N. Sobel, we provide comprehensive counsel to individuals throughout the state of New Jersey who seek to address financial challenges through bankruptcy. Contact our office online or call us at 856-424-6400 to see if you qualify for a free initial consultation (on selected cases). Evening and weekend appointments can be arranged upon request. We accept all major credit cards.

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